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Friday, 15 November 2013

Defence Minister
AK Antony will induct the long-delayed aircraft carrier INS Vikramaditya,
designed to boost India's maritime capabilities, at a shipyard in Russia on
Saturday.

Antony will leave
for Russia tomorrow with a high-level delegation, including Defence Secretary
RK Mathur, on a four-day visit during which, apart from commissioning the
aircraft carrier, he will also co-chair the India-Russia Inter -Governmental
Commission on Military Technical Cooperation with his Russian counterpart,
Sergey Shoigu.

Contracted for in
2004, during the NDA regime, the vessel has been delayed by over five years and
has seen several time and cost-overruns in the last nine years.

“The commissioning ceremony
will take place at Sevmash Shipyard, Severodvinsk, on Saturday and the
IRIGC-MTC meeting will take place in Moscow on Monday,” a Defence Ministry
release said.

India has
diplomatically rejected China’s proposal of including army representatives from
both sides in the existing mechanism for resolving army-to-army issues rather
than having a hotline between military operations directorates in Delhi and
Beijing.

Currently a joint
secretary-level Working Mechanism for Consultation and Coordination on
India-China Border Affairs between the two foreign ministries tackles such
issues. It will meet in New Delhi next month.

South Block
sources said there was no closure on proposed hotline between the two Directors
General of Military Operations (DGMO) as Beijing wants Indian DGMO to be in
touch with People’s Liberation Army (PLA) Headquarters of either Lanzhou or
Chengdu military regions—both responsible for handling the defence of
3,488-km-long Line of Actual Control (LAC) between the two countries.

In this context,
Beijing wanted a representative each from PLA and Indian Army as a deputy in
the Working Mechanism and equipped with a hotline to defuse any tensions due to
the disputed boundary issue.

The Indian
assessment is that Chinese foreign ministry wants PLA to keep it in the loop
rather than independently handling the border flare-ups directly with Indian
Army. However, India has rejected this proposal and wants China to designate a
senior PLA general in the Military Headquarters in Beijing to have a hotline
with DGMO, Army Headquarters in Delhi.

The counter
proposal was moved as PLA does not have a position of DGMO in the Military
Headquarters and each Military Region is responsible for its own operations.

While DGMO-level
hotline is work in progress, the opening of a new border personnel meeting
point in Kibuthu has run into logistics problems, with PLA wanting to shift the
flag meeting point away from Bum La in Arunachal Pradesh due to distances and
forces involved. Both these issues will be discussed in the next meeting of the
Working Mechanism.

While India and
China have signed an MoU on trans-border rivers during PM Manmohan Singh’s trip
last month, already there are grumblings within ministry of water resources
over the agreement.

All the new MoU
does is extend the date of China handing over Brahamputra river hydrological
data for another 15 days.

Instead of China
sharing Brahmaputra data from June 1 to October 15, the MoU extends it to May
15 instead of June 1.

Water resources
ministry officials say that India had to contend with 15 more days of data
despite logical demands that Beijing should share Brahmaputra historical water
flow data, standardise the water measurement levels between the two countries,
expand the number of days for giving hydrological data and include Sutlej
river, which rises in Tibet, in the new MoU.

In February 2010,
Italian helicopter maker Finmeccanica won a contract for 12 helicopters from
the Indian government. The $750 million contract for AugustaWestland
helicopters was the biggest for the company in recent times. For Finmeccanica’s
CEO Giuseppe Orsi, it meant that the company stood a good chance of getting the
Indian Navy’s $250 million light helicopter deal as well.

As it turns out,
the AugustaWestland deal stands cancelled. Earlier this year, Orsi was put in
jail by Italian authorities in Milan for paying bribes to secure the agreement.
Bruno Spagnolini, who reported to Orsi and headed the helicopter unit, was put
under house arrest. Indian defense minister A. K. Anthony has said the company,
in the race for aerospace contracts worth $12 billion in India, might be
blacklisted.

With Pakistan in
the west and China in the east — both of whom India has fought wars with —
India is relying on defense equipment that is more than 20 years old. That puts
the country’s defense preparedness at its lowest since the 1980s. India relies
on foreign players for 70% of its defense needs.

“Blacklisting major defense
companies — and we have already done that with six — would mean [that] we can’t
modernize our armed forces. That would be disastrous,” says a senior official
in the Indian army. The main worry in Indian defense circles is that contracts
take years to be signed, and then sudden controversies crop up, preventing
deals from going through. Ultimately, no one wins. To date, blacklisted
companies include Rheinmetall Air Defence, part of Germany’s Rheinmetall AG,
Israel Military Industries and Singapore Technologies Kinetics. All have been
barred from defense deals for the next decade.

In the 1980s, the
government of Prime Minister Rajiv Gandhi collapsed over charges that the
Swedish gun manufacturer Bofors paid bribes to supply Howitzer field guns to
the Indian Army. After that, India did not purchase any guns until last year,
when the government signed a deal with U.K.-based BAE systems. That means for
20 years the Indian army did not have the Howitzers it needed to combat even
low-level attacks from across the border.

Dealing with
Corruption

While Antony is
known for being honest, he has been extremely slow at making decisions and
designing better policies. A top executive at Boeing told Knowledge@Wharton,
“It does take time with other governments as well, but in India the process of
decision making in defense deals is extremely slow.” The companies are not
going away, though — all want a share of the $100 billion that India is
expected to spend on defense over the next five years.

This is not the
first time that allegations of corruption have stalled a deal with no
alternative in the works. In 2003, India issued an order for 197 light
helicopters worth between $500 million to $600 million. Sixty helicopters were
to have been purchased outright, with the remaining 137 being built under
license by Hindustan Aeronautics Limited (HAL). Eurocopter’s AS550 C3 Fennec
and Bell Textron’s 407 competed in the second and final round of summer trials,
and as 2007 ticked toward a close, it looked like Eurocopter would emerge the
winner. But then reports of corruption emerged, and the deal was derailed. To
date, another deal has not been signed. That has delayed the army’s modernization
efforts. “India will find it difficult to match up to China at this rate, given
[the latter's] ongoing modernization and massive capacity-building. In the next
few years, there will be a big gap in deterrence,” notes Rahul Bhonsle, a
defense analyst based in New Delhi.

The problem now is
two-fold: How to weed out the corruption before entering into a contract, and
how to speed up decision-making once such cases have been found.

A defense ministry
official says that one of the causes for delay in finalizing contracts is
differences between the ministry bureaucrats and senior officers in the Indian
armed forces. Unlike countries such as China or Russia, where senior defense
ministry officials have prior experience working in the armed forces, Indian
bureaucrats come from a separate cadre. Army officials allege that these
bureaucrats have no experience and little knowledge of the industry. However,
the defense ministry official says that matters are made worse by involvement
of defense personnel in corrupt deals. In the helicopters deal, for example,
the Central Bureau of Investigation (CBI), the federal investigative agency,
named a former air force chief as one of the accused.

The slow process
of investigation means that Antony is moving ahead based on what others tell
him rather than on a firm footing. He recently said that Finmeccanica and
Augusta might both be blacklisted. That was before the CBI submitted its
report. On the other hand, Femeccanica has sent a bill to the Indian Finance
Ministry for the three helicopters it had already delivered before the scandal
broke, since no charges of corruption were actually proved. Under an “integrity
pact” signed with AugustaWestland, India can still cancel the contract and bar
the firm from bidding for any government contracts for at least five years.

Winds of Change

Saikat Chaudhuri,
executive director of the Mack Institute for Innovation Management at Wharton,
says that two things need to be done to clean up the system and introduce
transparency. “First, introduce a lobbying system like in the U.S., which
essentially regulates and makes transparent the basic human behaviors that lead
to corruption. After all, it is not that corruption doesn’t exist per se in the
West, it has just been recognized that such human tendency for power and money
is innate and must be regulated as it is impossible to eliminate.”

According to Raj
Kadyan, a retired army general and defense analyst, transparency in the process
is critical. “What you need right now is for the process to be transparent —
from the bidding process to the actual signing of the deal. Just blacklisting
companies without taking other steps won’t stop corruption,” says Kadyan.

The second step,
more specifically related to defense, notes Chaudhuri, is to nurture a healthy
private sector to partake and eventually form a substantial part of the Indian
defense industry. “This will help build the capability base and also prevent
everything remaining within the government ambit, including all procurement
processes. I wish to stress, however, that blind privatization or transfer of
work to private firms is not the answer…. It must be accompanied by a change in
system like the introduction of lobbying.”

It does seem that
things are changing, though slowly. The main reason is that the
government-owned industries like Hindustan Aeronautics Limited (HAL) or Bharat
Electricals Limited (BEL) have failed to deliver the contracts they won, and
with huge cost and time overruns. The best example is the Arjun Tank, which
remained in development for over a decade. Finally, the army ordered new T-90
battle tanks from Russia. A 2012 report by Boston Consulting Group said
productivity of public sector defense companies in India was half the national
average and lowest among all industries.

According to John
Elliot, a British journalist based in New Delhi for the past 20 years, many
forces have colluded to stall private players from making a mark in this space.
Elliot noted in his blog: “The Indian defense establishment, which includes the
defense ministry, parts of the armed forces, the public sector corporations,
foreign suppliers and defense agents, have all connived in the past to block
private sector development.”

Opportunity for
Private Players

While the public
sector firms are still trying their best to protect their turf, their
shortcomings are becoming harder to ignore. Last year, for the first time in
years, the Indian Army invited a private sector group to compete for a contract
to build a new tactical communications system. The private sector companies
involved are Larsen & Toubro, Tata Power SED and HCL. The first two have
been defense suppliers in smaller capacities for years and specialize in high-precision
engineering. HCL is one of the major Indian software firms. These three firms
will compete against Bharat Electronics, a defense public sector corporation.

The biggest push
to get more private players involved came last year when the Planning Commission
called for Indian companies to be prime contractors for all major contracts.
This is a big opportunity for private sector companies, which currently account
for just 20% of India’s defense spending. The new procedures have a “buy and
make Indian” provision — which means only local companies, including joint
ventures with overseas companies, can enter bids for contracts.

Since the new
procedures were announced, Mahindra & Mahindra, India’s biggest tractor
maker, set up a joint venture with Israel-based Rafael Advanced Defense Systems
for naval weapon equipment. Mahindra, which currently has negligible revenue
from its defense business, expects sales of about $500 million in the next 10
years, vice chairman and managing director Anand Mahindra said at that time.
Wipro, India’s third largest software exporter, has signed a deal with European
consortium EADS to manufacture aerospace precision engineering components.
Reliance Industries, the Mumbai-based operator of the world’s biggest oil
refinery complex, entered into an agreement last year with France’s Dassault
Aviation. Dassault is negotiating with the Indian government to sell 126 Rafale
fighter aircraft, the world’s biggest such contract in the last decade.

Of course, this by
itself doesn’t mean corruption will go away. As Wharton’s Chaudhuri says,
lobbying must also be permitted to make the process more transparent. “A strong
political leadership and will is of course desirable to develop the nation in
all respects. It is tragic and inexcusable that even national security in India
is compromised due to a lack thereof,” notes Chaudhuri.

A Conversation
With: Former Indian Army Chief Gen. Vijay Kumar Singh

Gen. Vijay Kumar
Singh was the chief of the Indian Army from March 2010 to May 2012. His tenure ended
on a bitter note after a dispute over his date of birth and consequent date of
retirement from the military service. Mr. Singh disagreed with the Indian
government and went to the Supreme Court of India, where he lost his case.

After his
retirement, he courted even greater controversy as he joined the anticorruption
protests led by the activist Anna Hazare, made startling revelations about
secret funds used to win the loyalties of politicians in Jammu and Kashmir, and
appeared in public with the Bharatiya Janata Party’s prime ministerial
candidate Narendra Modi.

India Ink spoke to
Mr. Singh, who has recently published his autobiography, “Courage and
Conviction.”

Q.

Why do you think
the Line of Control [the disputed border between the Indian and
Pakistani-controlled parts of Kashmir] has witnessed increased hostility and
fighting between the Indian and Pakistani militaries in the past few months?
There have been killings and beheading…

A.

I don’t know. You
should ask the people who are in charge. They should tell you. So far as I am
concerned, I stopped asking questions after May 31, 2012, when I retired. I
haven’t kept in contact with commanders on ground.

The men on the
border are the same. The senior commanders may have changed, but in the units,
the junior leadership is the same. Obviously, there must be something.

Q.

What’s your
assessment of the situation?

A.

My assessment is
that somewhere, I think, the politico-military signaling, or messaging, may
have developed a faultline. I will put it this way: The way the other country
perceives you is how it takes action. If it perceives and does a cost-benefit
analysis and finds that it is not going to benefit, obviously it will not do
certain things. What is this message that you are conveying?

Q.

After the killing
of five soldiers of the Indian Army at the Line of Control, certain sections of
Indian opinion have been concerned about the capability and response of the
Indian Army.

A.

There are serious
concerns in my mind also as to how this happened. What has been the action
taken after this? You can’t lose five people like this. Somebody has to
undertake serious introspection, and somebody has to ensure that remedial
measures are taken. I don’t know whether this is done or not. I’m not sure.

Q.

There might be
some mistakes on the part of the Indian Army…

A.

Yes that’s what I
am saying. Serious introspection is required as to how such a thing could
happen. Now, I am not privy to how the incident has taken place except for what
keeps coming in the newspaper. There are a lot of newspaper reports that I
don’t believe because I don’t know what they are writing.

Q.

Can the local
commanders take action? Or do they have to wait for a political message?

A.

Obviously. That’s
what I am saying. What is it where the messaging has gone wrong? I don’t know.
I can speak with certainty about it till the day I retired. In my tenure, the
soldiers and the commanders were clear about how a particular situation has to
be dealt with. They knew that they had my backing as the chief and I would
stand by them. I have always felt that mistakes are of two types — one is of
intention and one is of judgment. A mistake of judgment must be always
pardoned, but a mistake of intention can never be pardoned.

Q.

Do you think a
different army chief would have dealt the problem differently?

A.

I don’t know. I
really don’t know and I am not guessing on it, except for saying that the
messaging may be wrong. It is a series of incidents. When you say that 40
people infiltrated into our territory and you don’t recover a single weapon,
don’t find a single body. You have lost people, it worries me. There is
something wrong.

Q.

How do you see the
security situation in the coming decade in terms of China and Pakistan?

A.

The security
situation depends on how you deal with your neighbors, what kind of measures
you have taken. Security situation depends on how your adversaries perceive
you. If they know that they will get a bloody nose, then they will stay away
from you. If they know they can push you around, they will push you around.

Our relationship
with Pakistan has never been fruitful because there is a serious lack of trust
between the two countries. The Line of Control remained stable till the Kargil
War in 1999. Somebody took advantage of it after the political leadership had
gone all out to woo the other side. But that trust was betrayed.

Today, you shake
hands and say everything will be fine. Will it be? Each Indian feels it that
way and there’s a question mark. Can you trust that man? Can you trust their
leadership? It is not a question of creating conducive environment because
somebody wants to be nominated for a Nobel Peace Prize or whatever it may be.
It must result in something positive. Till the time a trust deficit remains
between India and Pakistan, we have a problem.

Q.

What are the
alternate strategies of dealing with Pakistan?

A.

There are ‘n’
number of things.

Q.

You recently
appeared in a public gathering with the B.J.P leader Narendra Modi. Are you
planning to join B.J.P. and contest elections?

A.

If I share a
platform with you, sit with you and have dinner in your house, does that mean I
am going to join The New York Times?

Q.

Mr. Modi has been
declared the prime ministerial candidate of the B.J.P.

A.

He was declared
the prime ministerial candidate two days before the rally. He was supposed to
come for this ex-servicemen rally for which he was invited and so was I. I
don’t think he suffers from any allergy that would have afflicted me. Actually
I find this interesting and everyone has asked me this question.

I have asked a
counter question. You have been invited to an ex-servicemen rally to espouse
the cause of ex-servicemen. And I’ve asked people whether they have heard his
speech. In his hourlong speech, did he talk of anything political? He talked
about defense, national security and the welfare of ex-servicemen. Did he talk
about politics or about overthrowing a government? He didn’t.

Q.

Do you intend to
join politics?

A.

I haven’t thought
of it so far. The unfortunate part is that when I speak from my heart, people
say you must be hiding something. So far, I have had no options to join
politics. I don’t know what the future holds. I live in the present.

Q.

You were active in
Anna Hazare’s anticorruption movement. He has been rather quiet for a while.

A.

He is not well, so
we are not holding any rallies. We had planned to travel to Bihar, but we have
not been able to. We haven’t held certain events because he was operated upon.
That is why you see a little cooling down. It has nothing to do with public
response. It is more to do with his health. We are not like those people who
will put him on fast and force him to carry on. We care for him.

Q.

There has been a
lot of talk about the Indian Army’s weapons procurement system being entangled
in corruption.

A.

The whole system
needs to be looked at again. This system is not delivering.

Q.

There have been
numerous crashes of Indian Air Force planes. We hear a lot about corruption and
scandals within the Indian military establishment.

A.

That’s why we need
to re-look at the system. We need to see what changes are required and push
those changes. The whole procurement system is one where we need to take a
look. The Kargil Committee made certain recommendations, and we haven’t
implemented them. Naresh Chandra Committee came after 10 years and they have
made certain recommendations.

I think a time has
come where we have to say “no more committees.” Let us change things for the
better. One change is the integration of the armed forces with the bureaucracy.
It has not happened. The higher defense management and organization, the system
of indigenous weapon production needs a re-look. It needs to be geared up. The
research and development and the procedural issues attached to these need to be
looked at.

http://www.defensenews.com/article/20131111/DEFREG03/311110018

India Again
Considers Buying Israeli-made ATGM

NEW DELHI — The
Israeli-built Spike anti-tank guided missile (ATGM) is back on the Indian
Army’s acquisition agenda. The potential purchase of the missile arose during a
Nov. 11 meeting of the Defence Acquisition Council (DAC), which likely will
take up the issue again when it meets later this month, an Indian Defence
Ministry source said.

The purchase of
the Spike was put on hold in April as it was a single-vendor procurement from
Israeli company Rafael. But the Indian Army is in a hurry to get advanced
ATGMs.

The renewed
interest in the Spike is unlikely to affect a US proposal to jointly produce
the Javelin ATGM with India, the Defence Ministry source said, because the Army
needs more than 20,000 advanced ATGMs. The Spike, if purchased, will be
vehicle-mounted, the source said, while the Javelin will be man-portable.

The Army currently
depends on Konkurs M and Milan ATGMs, which are less than 2,000 meters in
range.

The Indian Army’s
2010 request for proposals (RfPs) for advanced ATGMs went to Rafael,
Paris-based MBDA, US companies Raytheon and General Dynamics and Russia’s
Rosoboronoexport. Only Rafael responded to the tender; the other companies
balked at India’s technology-transfer requirements.

The Indian Army
now proposes to buy third-generation Spike ATGM systems including 321 missile
launchers, 8,356 missiles and 15 training simulators and associated
accessories, along with transfer of technology. The Army would mount the Spikes
on its Russian-made BMP-2 infantry combat vehicles.

US Deputy Defence
Secretary Ash Carter formally proposed the joint development of the Javelin
during a September visit to India. The Americans have agreed to sell about
6,000 man-portable Javelins to India within six to eight months of a contract
signing, and for future needs the US can explore co-production of the missile
and later work on the co-development of an ATGM tailored for India. The
Americans have also agreed to transfer technology including the special process
for manufacturing the Javelin’s warhead, rocket motor, propellant, guidance and
seeker, but no algorithms for guidance, which an Indian Army official said is
the core to any guidance system.

A team from
Raytheon and Lockheed Martin has already briefed Defence Ministry officials on
the possibilities of joint development of the Javelin.

Aiming to enhance
his nation’s already robust defence ties with India, Israeli Army Chief Major
General Guy Zur is here on a four-day visit to explore further possibilities in
joint training and exchanges.

Zur, who is the
Chief of the Ground Forces Command of the Israeli Defence Forces, met with
Defence Minister A K Antony and the heads of the three Indian Armed Forces. The
two sides discussed security situations in South Asia and West Asian regions,
the officials said on Tuesday. Zur will travel to Agra on Wednesday to the
Indian Para Special Forces unit to inspect the facilities and interact with the
troops. Indian and Israeli Special Forces train regularly in counter-terrorism
and counter-insurgency operations.

He would also be
in Jaipur on Thursday to meet with the South Western Army Commander Lt Gen Gyan
Bhushan apart from going around important places around Jaipur. He will also be
in Mumbai on Friday before flying back to Tel Aviv.

Israel has been
building a strong military-to-military relations with India in recent years and
have emerged as the second largest defence supplier to India behind only Russia
in the last decade-and-a-half.